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Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework

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  • Ponce, Roberto
  • Parrado, Ramiro
  • Stehr, Alejandra
  • Bosello, Francesco

Abstract

This paper analyzes the economic impacts of changes in water availability due to climate change. We develop a new modeling approach as an alternative to include water as a production factor within a global CGE model. We tailor the structure of the ICES model to characterize the key features of the world economy with a detailed representation of the agricultural sector. In order to reach this objective, a new database has been built to explicitly consider water endowments, precipitation changes, and unitary irrigation costs. Results suggest different economic consequences of climate change depending on the specific region. Impacts are related to change in crop production, endowment demands, and international trade.

Suggested Citation

  • Ponce, Roberto & Parrado, Ramiro & Stehr, Alejandra & Bosello, Francesco, 2016. "Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework," EIA: Climate Change: Economic Impacts and Adaptation 251813, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemei:251813
    DOI: 10.22004/ag.econ.251813
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    References listed on IDEAS

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    3. Alvaro Calzadilla & Katrin Rehdanz & Richard Betts & Pete Falloon & Andy Wiltshire & Richard Tol, 2013. "Climate change impacts on global agriculture," Climatic Change, Springer, vol. 120(1), pages 357-374, September.
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    6. Eboli, Fabio & Parrado, Ramiro & Roson, Roberto, 2010. "Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model," Environment and Development Economics, Cambridge University Press, vol. 15(5), pages 515-533, October.
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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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